The Financial Services Forum
Is customer relationship building worthwhile in the insurance industry, with its commoditised market and dominant price comparison aggregators?
Industry Solution Specialist
Customer relationship building is vital! It requires deeper insight into what influence's buyers so that revenue can be maximised. In my view, this means using existing data sources in new ways - for example, understanding the User's social, geographic and verbal interactions with the insurer. At IBM we are seeing some significant increases in policy conversion rates once cognitive and web analytics are deployed...some come ask us!
Head of Proposition
AXA PPP Healthcare
In short – yes, but the question is how.
As in any walk of life, relationships need to be built on core pillars.
In a generally low interest transactional category, how many brands offer a relationship that one might desire rather than need? How many brands question, listen and actually recognise you as an individual? And how many individuals genuinely trust that relationship?
So before we even consider delight me, surprise me and reward me, there are some core foundations required around brand promise, effective CRM and doing what you said you would do i.e. earning genuine long-standing loyalty.
I see brands turning to loyalty reward propositions while still not able to answer the phones, send out accurate communications or meet basic online servicing needs. Or in the case of my mobile provider, still not provide any decent 3G reception in a well populated area.
What relationship do they have and what loyalty are they rewarding? If they argue they are creating loyalty, then I would say it is short-term at best, until the next best points, discount or voucher scheme comes along. And even if it is a great loyalty proposition and a good relationship (as it is with me for O2), it still won’t last if they can’t sort the core promise (half decent data reception in an urban area).
So yes, build relationships, but fix the basics and do what you said you would do well first. As per the darlings of our industry First Direct, that will get you a long way to differentiation before you need to start looking at bought loyalty relationships.
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